Parental Leave Options in Australia

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The UK has just changed their laws to give more truly ‘shared care’ options for parents – when will Australia follow suit? Parental leave options in Australia are fast falling behind the rest of the world, with the UK’s recent improvements, is it time to review parental leave rights in Australia?

Shared Parental Leave is a new regime of paid parental leave entitlements that recently came into force in the United Kingdom. It applies to parents where a baby is born, or a child is matched or placed up for adoption, from 5 April 2015. The new UK system has polarised community opinion. Criticised in the media by some business groups as a ‘nightmare for employers’ and an ‘unaffordable system of middle class welfare’, others have applauded the changes as progressive and long-overdue. Despite the intense scrutiny in the UK, supporters of shared parental leave are growing in numbers. So how do our Australian parental leave options measure up?

Paid Parental Leave Options in Australia

Parental_Leave_options_AustraliaThe new UK regime differs significantly from its Australian counterpart. In Australia, all employees who have worked for at least 12 months in the lead up to the birth or adoption of a child can apply for 12 months unpaid leave. However, paid parental leave is a much more tightly-regulated commodity. Putting aside industry or award-specific entitlements, the Australian Government Paid Parental Leave Scheme caps paid leave at a maximum of 18 weeks at a current payment rate of $641.05 before tax. It also ties eligibility to paid parental leave to the requirement that the recipient be the primary carer of the child. Furthermore, subject to a few exceptions, applicants must have worked at around one day a week for at least 10 of the 13 months in the lead up to birth or adoption. Entitlements to Government paid parental leave end on the primary carer’s return to the workforce. Superannuation is not paid during this period and critics of our existing scheme point to the fact that the payment is more like a welfare payment and less of a reimbursement of the actual money lost by a woman on leaving the workforce to care for her child. Furthermore, the ability to transfer leave between partners is tightly regulated, making for a fairly inflexible system. Read more about Australian options for paid parental leave here.

 

The New UK Regime

By comparison, whilst the UK regime requires a birth mother to take a minimum of two weeks of leave immediately following the birth, the changes also allow up to 50 weeks of leave and 37 weeks of pay to be shared between parents. This leave can be taken in a block or divided up into separate periods of leave interspersed with periods of work. This means that leave can be tailored so as to protect against the career-stalling effects of taking a large chunk of parental leave all at once.

It also affords both parents the opportunity to take the leave. Furthermore, they can even take leave at the same time as each other. Prior to the implementation of the new UK program, it’s predecessor did not afford fathers the same rights to parental leave as mothers but that’s now been rectified. For more information about the UK system, click here.

Sadly, the Australian position is that Dad and Partner Pay allows for only two weeks leave paid at the national minimum wage. For a mother recovering from a traumatic birth or even a cesarean, two weeks is completely inadequate.

So what are we missing out on? The most vocal supporters of the new UK regime of Shared Parental Leave say it will contribute to making equality of the sexes a practical reality. It’s a step towards recognising that the contributions of women in a modern economy go far beyond that traditionally expected of them as care-givers. The new regime accepts the changing role of women in the workplace, even as primary breadwinners. Better still, it is a step towards protecting the rights of fathers to stay at home by providing the funding to make it a reality. It does this by providing flexible options that will enabling both parents to choose to re-enter the workforce after becoming a parent or enable them to become far more involved in caring for their child. It’s all about offering options for parents to share parental leave and pay entitlements that can be tweaked to suit their individual household and career needs.

The changes that have been implemented in the UK add weight to calls for Australia to rethink parental leave. However, if we really want to enliven parents options to choose what’s best for them we should look even further afield than the UK system for inspiration.

The Swedish Parental Leave System

In family-friendly Sweden, parents have up to 480 days paid parental leave. A whopping 390 of those days is paid at the rate of 80% of the parent’s normal pay with the balance at a flat rate.   What’s more, it can be taken at any time up until the child’s 8th birthday. Sixty days are reserved exclusively for the father to take, encouraging meaningful, hands-on time for fathers to bond with their children. Their progressive take on paid parental leave hasn’t impeded economic growth at all. In fact, the Swedish economy is booming. The World Economic Forum ranks the Swedish economy as the sixth most competitive economy in the period 2013-2014. Australia was ranked as the 21st.   Go figure. Imagine if true equality of the sexes could be achieved with a clever rethinking of the approach to paid parental leave options in Australia? And without cost to the economy? Now, wouldn’t that be a step in the right direction?

Read more about the Sweden’s approach to paid parental leave here.

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